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Introduction

The Cayman Islands Stock Exchange (CSX) recently revised its Listing Rules. The main amendments have rebranded the rules relating to equity securities in Chapter 6 to facilitate listings by mineral companies, mineral exploration companies, start-ups, and companies offering securities to "specialist investors". Rules for listing retail debt securities have been moved to Chapter 13.

Given the continuing obligations of issuers of equity securities under Chapter 6, Chapters 2 and 5 of the Listing Rules now require such issuers to retain a listing agent on an ongoing basis. A new provision in Chapter 5 allows suitably qualified corporate advisers (who may be based outside the Cayman Islands) to act as listing agents to equity issuers.

According to Nick Small, Head of Listing at the CSX, the CSX is targeting early-stage mineral companies

"Which can benefit from what it has to offer in terms of increased profile and prestige in listing with an internationally-recognized exchange, as well as the advantage of attracting investors who may prefer or require listed shares."

This update summarizes the main amendments to the Listing Rules.

Equity securities

Mineral companies, mineral exploration companies and start-ups will now be able to list – on the strength of detailed business plans – expert reports (where appropriate) and other detailed disclosures in place of historical financial statements. Mineral companies, mineral exploration companies and start-ups will be subject to continuing obligations. For the 12 months following admission to listing, shareholdings of directors, senior managers and substantial shareholders of start-ups and mineral companies will be subject to a lock-up.

The CSX now has the flexibility to determine the suitability for listing of specialist companies, suitable for investment only by qualified investors which subscribe at least $100,000 for securities in the issuer and which are particularly knowledgeable in investment matters.

Amendments to Chapter 6, which will affect all equity issuers, include requirements:

•to notify the CSX of any new developments which may materially affect market activity in, or the price of, the listed securities; and

•to seek shareholder approval for any transaction which may result in a fundamental change of business for the issuer, including a reverse takeover or a significant disposal or a significant transaction with a related party. The content of any shareholder circular relating thereto must be approved in advance by the CSX.

Listing agents

Unless otherwise agreed by the CSX, issuers of equity securities must have and maintain a listing agent on an ongoing basis. Whenever an issuer is required to submit a shareholder circular for approval by the CSX, a listing agent must be appointed to liaise with the CSX.

Corporate adviser

An issuer listing equity or publishing a circular under Chapter 6 may now appoint a suitably qualified corporate adviser as its listing agent under Chapter 5 of the Listing Rules. Such corporate adviser may be based outside the Cayman Islands and must have, as appropriate, regulatory authorization to conduct its business.

The opinions expressed do not constitute investment advice and specialist advice should be sought about your specific circumstances.